Judge Declares HCR Law Constitutional

October 8, 2010 (PLANSPONSOR.com) – In the first ruling on the merits of a health reform law challenge, a federal judge in Michigan has deemed the law constitutional and rejected arguments Congress cannot require Americans to buy health coverage.

The Washington Post reported that U.S. District Judge George Caram Steeh of the U.S. District Court for the Eastern District of Michigan issued the ruling in a challenge filed by three individuals and the Thomas More Law Center, an Ann Arbor-based non-profit public interest law firm (see Government Responds to Health Care Reform Lawsuit).

The suit alleged Congress does not have the right to force people to buy health coverage or pay a penalty, which plaintiffs said would go into the federal government’s general fund and could be used to fund abortions.

Steeh also rebuffed an argument that the situation does not qualify for coverage under the Constitution’s Commerce Clause because deciding whether to buy insurance is actually an inactivity rather than an economic exercise.

According to the Post, however, Steeh found that “far from ‘inactivity,’ by choosing to forgo insurance, plaintiffs are making an economic decision to try to pay for health-care services later, out of pocket, rather than now through the purchase of insurance, collectively shifting billions of dollars . . . onto other market participants.”

Finally Steeh contended that unless young and healthy people are required to purchase coverage, the pool of insured Americans would be skewed toward the sick, the Post report said. That in turn, the argument went, would make it impossible for insurers to comply with protections such as the law’s prohibition on discriminating against those with preexisting conditions.

The Post said the Michigan case is one of 15 to 20 health reform challenges, according to a Justice Department estimate. Among the most prominent are a suit filed by 20 states in federal court in Florida and a similar suit filed by the state of Virginia before a federal judge. The judge in the Virginia suit denied a government motion to dismiss the case and is scheduled to hear oral arguments on the merits on October 18 (see Judge Moves Forward Virginia Lawsuit over Health Care Reform).

A government motion to dismiss is still pending before the federal judge in Florida, but he has indicated that he, too, plans to deny it (see Business Group Joins HCR Challenge).